18 February 2004
BERLIN – Germany’s Finance Ministry Wednesday rejected a European Commission warning that Berlin was in danger of again overshooting the eurozone’s budget deficit limit in 2005.
“We assume that we will be able to stay under the limit – albeit amid difficult circumstances,” said finance ministry spokesman Joerg Mueller.
In Brussels, a European Commission report said Germany might fail to reduce its state deficit to below 3 percent of GDP – as required in the eurozone’s stability pact.
The Commission said Germany’s growth predictions, tax revenue projections and state spending developments were not realistic for the period 2005 to 2007.
Germany is expected to overshoot the limit for a third year in a row in 2004, probably with a 3.25 percent budget deficit.
Last year Berlin and Paris – which has also repeatedly failed to keep its deficit under 3 percent – convinced a majority of EU finance ministers to suspend measures required by the stability pact which could have led to massive fines or fiscal directives from Brussels.
This angered smaller countries which have kept deficits under control in recent years including Austria, the Netherlands and Finland.
Subject: German news